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The recession has changed what people consider luxury. Big mansions or fancy cars were once thought as lavish items, now a rent-stable apartment or a fully-paid car is already considered extravagant. Even for the previously well-off, the current financial status has strained their savings considerably. This is evident by the increase in coupon clipping all over the country, regardless of status or rank.

To put it in simple terms, people have already realized the importance of a budget. It makes sense because a budget enables people to live without fear of spending too much and ending in debt. A budget enables people to enjoy their life without constant worry.

Before we begin with the guide, it’s important to consider what “living comfortably” means. For some people, living in a high class apartment and enjoying 3-day vacations are comfortable. On the other hand, some people consider eating out regularly as part of a comfortable lifestyle. What we’ll focus on is how to get the most out of your money without getting too worked up on bills.

Learn to Prioritize

How you prioritize your short-term and long-term goals depends heavily on your culture and how you were brought up. If everyone you know has the latest gadget fresh off the market, then you will also think that having the same gadget is comfortable and normal. Even if it’s way beyond your earning power, acquiring these items can be desirable yet not the best decision for you.

Prioritizing the right way involves thinking outside the box and evaluating your spending at a realistic level. Compare your spending with an average family’s so you’ll get a clearer picture. There are lots of resources you can find online for this; you can even compute your own budget and savings.

Use Budgeting Tools

Create a budget from the income you have right now. Numbers and figures might come across as boring and mind-numbing. Remember that a budget can mean paying off your basic expenses while enjoying dinner outs or night-outs with your friends and eating leftovers for a whole week.

There are a lot of budgeting tools you can use. Some tools are available online, for your phone, for your pc (offline), and you can even do it old-school with paper. These tools will enable you to not only create a budget, but also track your spending. Make sure that you stick with your budget though, or all your effort will go to waste and you’re back to square one.

Eat Frugally

The concept on how to save on food expenses can be very fierce. Some people are willing to miss a lot of payments just to eat delicious food. Others also understand the need to prepare their own food on a daily basis. Whatever side you choose, the fact remains the same: you need to eat.

Review your food expenses to see the areas where you can save. It might be the ingredients you buy, the type of food you cook, or even the times you eat out. For the ingredients, you can buy non-perishable items by bulk so you can store them for a long time and they are also sold at a cheap price. Coupons are always there for you to use them. You’ll be able to save a lot by spending a few minutes just searching for them or cutting them out.

In terms of cooking, you can cook dishes good for several servings and store them in smaller containers. This way you’ll have options for your lunch at work or dinner. You simply reheat them, so you save time and effort as well.

Choose an Appropriate Accommodation

House expenses (rent, mortgage, and bills) rank one of the highest for everyone’s budget. You might think that it’s not possible to save on these expenses, but it’s actually achievable. For starters, try to check your house or apartment size. If it’s too big for your family, then you’re spending more than necessary. You don’t need to live in a big house just for bragging rights. It won’t make sense when your house is big, but you won’t have food on the table or clothes on your back.

If you’re living in an apartment or have a spare room in your house, you can share your house (and bills). Finding a roommate or tenant is a good way to earn income on the side just enough for bills. It’s also much better than wasting that extra space. Finding the right tenant or roommate can be a bit of a challenge, but considering that you’ll be staying with that person; then it’s a very important step.

Review Insurance Policies

Check and recheck your insurance policies (health, home, car, etc). Make sure that you’re paying only for what you need and it’s appropriate for your situation. In the case of auto insurance, you should check if you’re still paying damage insurance even though your car is a few years old. In this case, it might be better if you omit that. In case of an accident, you can pay much lower for damage costs yourself if your car is outdated. Having an insurance company that takes care of this means that they’ll pay premium for it and let you handle the staggered payments.

For your health insurance, review the competitors’ policies and prices. You might be paying too much for your current health insurance. If you mention that you’re transferring from another health policy provider, you might even score some big discounts.

Create Goals

Having a short-term and long-term goal will motivate you to save and put down that extra item in the grocery. Create a separate account and a specific amount just for your goal. Don’t touch the money in this account; just use the one from your main savings. When you reach your specific amount, then you can use it for your goal. It can be a vacation or a major expense, what’s important is you save for it over time and not buy it immediately.

Pay Your Debts

Having a mounting debt will severely limit your saving potential. Not only will your money go towards debt, but you might even find yourself under more debts in the future. A good method to pay off your debts quickly is to use “snowball” payments. What you do is to pay the minimum for all your debts, but spend a huge allowable amount on a single debt. When you paid off that debt, you still spend the same amount and spend it on another debt. This way you’ll pay your debts off in no time and you can focus on saving.

No matter what status you have or how much you earn, it’s very important to live within your means. The economy has shown to be very unstable and you wouldn’t want to be caught off guard in the future when you’re retired or when you have your kids’ education to worry about.